The proposed research will demonstrate feasibility for a novel, homogeneous method for detection of nucleases; which can be used for drug discovery of nuclease inhibitors and for detection of nucleic acid hybridization. This method uses complementation of inactive enzyme fragments of E. coli beta-galactosidase as a signal amplification mechanism: Unique,cyclic molecules will be constructed to contain a peptide required for beta-galactosidase complementation, along with an oligonucleotide recognition site for nuclease. Cleavage of the oligonucleotide will allow formation of active enzyme, thus providing catalytic amplification of the nuclease cleavage event. The nuclease detection method is extremely sensitive, due to the low background activity of the cyclic enzyme fragment, the rapid formation of active enzyme upon cleavage, and the high turnover rate of beta-galactosidase. This novel method can be used as an assay for specific nuclease enzymes, to enable high throughput screening of compound libraries for potential drugs which inhibit nucleases with key cellular regulatory roles, such as nucleic acid replication, mismatch repair and apoptosis. In addition, nuclease cleavage can be coupled to detection of nucleic acid hybridization, including detecting sites of sequence mismatch which represent mutations or sequence polymorphisms (e.g., SNPs). The high sensitivity of the beta-galactosidase complementation method will simplify detection of SNPs, with the potential for eliminating target sequence amplification. PROPOSED COMMERCIAL APPLICATIONS: The functional genomics field is a multiple billion dollar market. Our technology will greatly reduce the costs of doing mutation analysis of genomic sequences providing us with a competitive advantage over any other functional genomics company. This would be a market worth hundreds of millions of dollars. Furthermore, the nuclease assays would be the first such assays for HTS and could open up a new field of drug discovery, garnering even more funds.